Scrap coalition forms to unite against global trade barriers
United States exports tripled in recent years

As steel scrap prices reach record levels of more than
$600 per ton and with United States scrap exports steadily
rising, a group of steel scrap-using industries has formed
the American Scrap Coalition and urged immediate governmental
action to remove global barriers to trade.

The United States steel scrap processing and consuming
industries are facing a steel scrap export crisis. Steel
scrap exports from the United States have tripled since
2000, rising from 6.3 million tons in 2000 to more than
18 million tons in 2007. Scrap exports have surged to
a variety of countries, including Turkey, Taiwan, Malaysia,
Thailand, India, Egypt, Greece, Hong Kong, Pakistan,
Indonesia, Japan, Italy, Vietnam, Bangladesh and Colombia.
China and Korea also remain among the top five destinations
of scrap exports.

Meanwhile, United States scrap imports in 2007 decreased
23 percent from 2006, from 4.8 million tons to 3.7 million
tons, as numerous countries have erected trade barriers
to restrict steel scrap trade and maintain their scrap
for domestic use.

“Steel scrap trade does not occur on a level playing
field,” said Alan Price, president of the new American
Scrap Coalition and a partner at Wiley Rein LLP in Washington,
which serves as counsel to the Coalition. “More than
20 countries, including Brazil, Russia, India and China,
have enacted a series of barriers to scrap trade in order
to protect their domestic steel industries.” These barriers
on exports are distorting trade in steel scrap, Price
said, thereby raising scrap prices in the United States
market. United States steel scrap prices have surged
to unprecedented levels, from less than $100 per ton
in 2002 to more than $600 per ton today. This has led
to serious and growing concerns about domestic scrap
availability.

In response, industry associations representing more
than 1500 steel scrap consuming companies have announced
the formation of the American Scrap Coalition, and are
calling on Congress, the United States Trade Representative
and the Commerce Department to immediately address scrap
trade barriers.

“Many of our major trading partners maintain restrictions
on their scrap exports, through quotas and other export
restrictions,” said Thomas Danjczek, president of the
Steel Manufacturers Association. “Our government should
work immediately to remove these barriers, using any
and all means available.”

The American Scrap Coalition has identified several priority
issues:

•Identify and remove barriers to trade in steel scrap,
which hinder United States companies and global competition;

•Ensure that scrap exports are not permitted as an easy
way around state, federal, and international environmental
obligations; and

•Consider actions by Congress, the Commerce Department
and the Office of the U.S. Trade Representative to remove
trade barriers.

Sharp price increases and the potential for scrap shortages
are having significant effects on important manufacturing
sectors of the United States’ economy. The rising cost
and decreasing availability of steel scrap impacts all
manufacturers, buyers and consumers of steel scrap. If
actions are not taken to open markets abroad, the United
States needs to consider taking more aggressive actions.